From Nasdaq: 2025-02-14 03:30:00

Palantir Technologies (NASDAQ: PLTR) and Amazon (NASDAQ: AMZN) have outperformed the S&P 500 in the past year, with mixed analyst ratings. Jefferies’ Brent Thill rates Palantir as a sell with a $60 target price, while Amazon has a buy rating with a $275 target price. Wall Street has varying views on both AI stocks, with Palantir showing potential downside and Amazon showing potential upside.

Palantir reported strong fourth-quarter results, beating estimates with revenue up 36% to $828 million. The company’s customer count rose 43% to 711, and non-GAAP net income surged 75% to $0.14 per diluted share. CEO Alex Karp highlighted the company’s strong position in the AI platforms market.

Despite positive performance, Jefferies’ Thill has concerns about Palantir’s high valuation. With a forward price-to-sales ratio of 56, Thill believes that sustaining this multiple may be challenging. He pointed to Snowflake’s experience as a cautionary tale, where a high valuation led to a significant stock decline.

Amazon also reported solid fourth-quarter results, with revenue up 10% to $188 billion. The company’s GAAP net income increased 86% to $1.86 per diluted share, driven by operational efficiencies. However, guidance for the first quarter fell short of expectations, leading to a decline in the stock price as investors evaluated the impact of higher expenses.

Thill expects Amazon to face margin pressure in the near term due to investments in AI and logistics capacity. However, he believes that these investments will fuel future growth and enhance the company’s market position. With a dominant presence in e-commerce and cloud services, Amazon is poised for long-term success.

Investors should carefully consider the potential risks and rewards of investing in Palantir and Amazon. While both companies have strengths in the AI space, valuation concerns for Palantir and margin pressures for Amazon may impact their stock performance in the short term. Long-term investors should assess their risk tolerance before making investment decisions.



Read more at Nasdaq: Palantir Stock vs. Amazon Stock: A Wall Street Analyst Says Buy One and Sell the Other